Serial entrepreneur and author Walt Sutton likens a new business
to a baby. Care for it, nurture it, protect it, and it can be the
most rewarding and fascinating experience of your life. Leave it
alone for a minute, and-well, let's not think about what could
happen to it out there in the cruel world.

Yes, starting a business can be a lot like having a baby.
It's one of the most harrowing things you can do in life, yet
the rewards make the risk and responsibility worthwhile. Anyone can
start a business, but how well-prepared you are is often directly
correlated to how well it turns out. And hey, you even get to pick
out a name.

But like baby's first year, your first year in business can
be a new and confusing time. So how can you prepare yourself for
your first year in business? First, do your homework.

Expect the Unexpected
"There are a lot of start-up costs-entrance fees to trade
shows, gas and food when you spend your day meeting with people,
having your Web site built and hosted, company vehicle, mailings,
phone costs, business cards, brochures-that I don't think
people even think about when they start a business." -Julee
Wasserman

So how do you determine whether your brilliant idea will bring
in the bucks? Research, and lots of it. After Michael Trott woke up
from a dream with a business idea in his head, he and his wife,
Angela, didn't run out and start it right away. Instead, in
July 2000, Angela took leave without pay from her job to do
research on the idea-Timeless Message LLC, an e-commerce company
that provides personalized messages in keepsake bottles, which they
fulfill and ship in their home in Potomac Falls, Virginia.

Likewise, Julee Wasserman spent 10 months preparing to launch
Julee's Gorge Tours LLC, an event-planning company that unites
corporate planners with the local lodging and sport outfitting
companies in the Columbia River Gorge National Scenic Area, a
50-mile stretch that straddles Washington and Oregon. She enrolled
in a 10-month community college program, where she learned to do
the proper research and plan for her fledgling business.

Finding the Money

Next step: Obtaining funding. You have several options, and
unfortunately, none of them is easy. Should you try to fund it out
of your own pocket? Ask relatives for a loan? Try your luck at the
bank?

Expect the Unexpected
"You want to treat yourself as a business, not an employee.
You've got to price each job so you make a profit on it. You
think, 'This is so much more per hour than I would make at a
job,' but you're not counting benefits, overhead costs,
things like that. If you price too low, you may automatically be
discredited because [potential clients] will think you don't
know what you're doing because you don't charge
enough." -Janet Attard

Wasserman chose the first option by making a huge commitment to
her business: She sold her house for start-up funds. "I
decided that I would get rid of my house because it was the only
way I could do it," says Wasserman, who now works out of a
one-bedroom apartment in Hood River, Oregon, the main town in the
Gorge area. "So I did, and it wasn't tragic. I miss it,
but I think it was a worthy choice."

Another option-one many experts advise against-is asking family
for loans. "When you borrow money from family, then your
family is your business partner at lunch, dinner, Thanksgiving and
Christmas, whether you want them or not. And they may know
absolutely nothing about your business but want to give all sorts
of advice," says Janet Attard, author of The Home Office and Small Business Answer
Book and founder of Business
Know-How, an information site for SOHOs.

Next option: Going to the bank. Angela Trott cites this as her
biggest challenge. The couple began their business by using all of
the above methods and more: personal funds, credit cards and
borrowing money from Angela's mother. But when they needed a
larger infusion of funds, they sought help at the bank.
"Having never done this before, we thought, 'Gee, if we
show the bank we invested this much money, bought the inventory and
started this, they'll be proud of us and want to give us more
money because they'll see we're responsible.'
Wrong," says Angela. Luckily, they had been working with their
local Small Business Development Center, which helped them apply
for a SBA-backed loan, which they received in the nick of time for
their Valentine's Day 2001 launch.

Before you open a line of credit or call dad for a loan, Sutton
advises you go slow: "Start small enough so that the risks
aren't so large, you can't face them. Why not start part
time on a small scale, go through two or three iterations by
yourself to see if it really does make a 20 percent return on your
effort? If it doesn't, you haven't lost too much. It's
a lot better than borrowing $25,000 from somebody and it not
working."

Attracting Your First Clients

Another way to bite it in your first year: Spend way too much
money on ill-fated marketing campaigns that yield no customers. How
can you avoid that? Again, research and starting small.

"Spend some time really defining your market," advises
Denise
O'Berry, a small-business consultant who works with clients
on strategy and operations issues. "I see way too many
business owners using the 'splat' approach-just hoping that
something will stick. They end up wasting time and money."

Angela and Michael Trott didn't exactly use the
"splat" approach, but they did lose out with an
unsuccessful marketing campaign. When they first launched, they did
a series of local radio commercials for Valentine's Day, which
proved to be a success. So for Mother's and Father's Day,
they did the same thing, plus a cable commercial. But this time,
neither one worked. "There wasn't a specific call to
action," says Angela. "We really lost big on Mother's
Day and Father's Day."

Expect the Unexpected
"There's fear associated with having your own small
business, and it's absolutely appropriate because one of the
responsibilities you've taken on is survival, of providing for
yourself. On the other side of the coin, many people love the sense
of freedom they get and more than willingly pay the price of fear
for the enhanced sense of being alive. And then, when you make it,
there's a sense of 'Gosh, I can hardly believe it. I've
got this little secret, and I'm afraid to tell anybody. This
thing really works.' And it's a wonderfully liberating
feeling." -Walt Sutton

So what did work? "We had to figure out the best way to
market our Internet product, and lo and behold, it was the
Internet," says Angela. They began advertising on sites where
their romantic gifts would feel at home-LovingYou.com and The
Romantic's Guide-and saw their site traffic soar.

Julee Wasserman found one of her best marketing tactics-local
trade shows geared to corporate event planners-through research.
After visiting the shows, she then calls new contacts to ask if she
can give a 10-minute presentation. "If I hadn't done those
presentations, I wouldn't have had any business at all. But I
was going there, putting a face to the business, being really
personalized and selling them on it." She also obtains new
clients through referrals, and some trickle in to her Web site.

Attard offers these other ways to market your new business
without spending too much money:

Call your friends and see if they know anyone who might need
your service.

Keep in touch with former employers who may be potential
clients.

Network in your community.

Read your newspaper to find out who's doing what and who
might need your services, then send individual letters to
them.

Partner with other business.

Surviving the Change

Finally, you've got to deal with a whole new mind-set. You
are the master of your own fate, and that's a heck of a lot of
responsibility. And since you've decided to start this business
in your own home, you've also got to deal with many of these
new issues alone.

Expect the Unexpected
"What I hear from new business owners is, 'You mean I
actually have to sell this to people?' Most don't go into
business because they like to do the tasks that are related to
providing their product or service. They think that people are
going to form a line at the door to buy what they have to offer as
soon as they hang out the shingle. It just doesn't
happen." -Denise O'Berry

Peers are an oft-forgotten but essential part of work-even when
you're a solo flier. "You need to create some society in
your work life that you weren't required to create
before," says Sutton. "And there's a lot of richness
if you recognize this and then go out and do it. I know people who
have put together the equivalent of informal coffeehouse support
groups for themselves."

Another homebased trap to watch out for: working too much. Trott
enjoys working at home (though she's not alone, with her
husband as a partner and her brother-in-law as a full-time
employee), but "it can be very tiresome because I'm a
workaholic," she says. "I'm like, 'If I could
only get this one more thing done,' and the next thing I know
it's 11 o'clock at night."

So how do you know when to say when on your work day?
"There is so much to do. It can truly be overwhelming,"
says O'Berry. "Break it down into bite-sized pieces,
tackle those things that will help grow the business, and outsource
the rest. Set business hours, communicate those hours to customers,
and live by what you have set up."

Getting Help

Freebies from the government. The SBA and its programs
can be a godsend to new entrepreneurs. Check out SCORE, SBDCs and your local
SBA offices for
more information.

Trade and business associations. Trade associations are
essential for industry-specific information like licensing
requirements, market research and suppliers. Find yours through the
World Directory of Trade and Business Associations (Gale Group) at
your local library.

Mentors. Both Wasserman and Trott swear by their
mentors. Wasserman found hers through a community college course,
and Trott's is her husband's former military supervisor,
who is also an entrepreneur.

Community organizations. The chamber of commerce, the
Better Business Bureau and other like organizations can provide
networking opportunities, the chance to find mentors and more.

Local colleges and universities. You can find
information on executive education programs here, or inquire at your local college to find out
what programs and courses they offer.